from the bad-ideas dept

Never underestimate the ability of those who over-rely on intellectual property to not just push for greater protections, but to try to pin greater and greater liability on others who they want to rope into their own fights. Phil Corwin has an article about how the Council of Better Business Bureaus, along with the Coalition Against Domain Name Abuse (a motley crew of mostly banks and insurance companies, but with random others like Dell, DirecTV and Eli Lilly thrown in there), are looking to change the Anti-Cybersquatting Protection Act (ACPA) to make it more SOPA-like when it comes to cybersquatting.

Their goal is to enact amendments to the U.S. Anti-Cybersquatting Consumer Protection Act (ACPA) that would expand the law’s coverage beyond domain registrants by creating secondary liability for domain system intermediaries like registries and registrars, increase statutory damages penalties for all targets, and establish a ‘loser pays’ regime that favors deep-pocket corporate litigants.

As with SOPA, they're using pure FUD to make this argument, inflating the "threats." With SOPA, copyright maximialists sought to conflate actual dangerous situations like counterfeit drugs (which were minimal in number) with non-dangerous activities that were more widespread (sharing movies and music). Here, the BBB and CADNA ramp up FUD about how phishing attacks use cybersquatted domains to trick people into handing over their info. Except, as Corwin notes, the actual evidence on phishing shows that it's rarely cybersquatted domains that are used in phishing (in part because companies are already quick to spot those and deal with them). In fact, he points out that the very research the BBB and CADNA are relying on to hype up cybersquatting notes that only 2.3% of phishing domains actually contain a brand or variation of a brand.

And, as with SOPA, the real goal here is to pin liability on a ton of third parties (beyond just registries and registrars) making them responsible if they happen to do business with a cybersquatted domain:

Of course, under CADNA’s proposal this potential financial jeopardy would be faced by parties far beyond the domain registrant, as they also want to “Establish liability against an affiliate, representative, or any other person or entity that is in active concert or participation with the registrant, including but not limited to a domain name registrar or domain name registry.” Potential liability would also accrue to “Internet parking pages, pay-per-click advertising, and other monetization schemes”. In other words, not just domain industry participants but everyone else involved in the Internet business ecosystem, including ad providers and payments processors, would be brought under ACPA jurisdiction if CADNA had its way. As we saw with the rightfully failed SOPA legislation, secondary liability would either vastly expand the potential windfall to litigants or cause these service providers to cut off domains at even the hint of a lawsuit, depriving registrants of the very domain-generated income required to fund litigation defense when they believe the allegations against them are bogus.

While this wouldn't impact the public as directly, it's basically a trademark version of SOPA, more specifically focused on cybersquatting. But even just setting the precedent of greater secondary liability would be a huge problem. Trademark already suffers from a lack of secondary liability safe harbors. Pinning direct liability on third parties for the actions of others is a step in the wrong direction.

from the trademark-abuse dept

In the latest example of extreme trademark abuse, video game company Gaijin Entertainment is not just claiming a trademark over "gaijin" but using it to demand the domain name Gaijin.com, which was registered by Brandon Harris back in May of 1995. The legal nastygram that the company sent is quite incredible, suggesting that Harris registered the domain later and is somehow infringing on their mark:

It came to our attention that you registered and maintain a website www.gaijin.com
(“Infringing Website”) that infringes Gaijin Mark. By maintaining and offering to public your
content via the website, i.e., Infringing Website, having the same domain as Gaijin Mark, you
create consumer confusion and mistake as to the source, sponsorship and/or affiliation of the
Infringing Website and Gaijin, thereby infringing Gaijin Mark.

Luckily, Harris has Mike Godwin (yes, that Mike Godwin, so get your Nazi references in early) as a lawyer, and he quickly sent back the following excellent response.

That is the most polite way to state how vigorously we dispute your attempt to assert flat ownership of the word “gaijin,” a word so well-established in English that it is an entry in the Oxford English Dictionary.

Currently, I’m advising my client to publicize your demand letter, so that the entire game-consuming public will be made aware of your client’s overreaching trademark assertions. In addition, we will of course continue to make clear that Brandon Harris’s website in no way gives rise to any kind of marketplace confusion of the sort that American trademark law is designed to address.

In the interests of allowing you and your client to gracefully retract your claim, we have chosen to refrain from publicizing your demand until you respond to this message, provided that you respond no later than close-of-business Monday. Since I am currently in DC, Eastern time applies.

–Mike Godwin

P.S. I understand that your clients are possibly Russian nationals. You may wish to explain to them the scope and limitations of the Lanham Act in the United States.

–MG

Obviously, they did not retract the claim in time, and thus, the trademark bullying is now public.

from the this-is-going-to-be-a-disaster dept

We've talked about the fact that the whole "generic top level domain" (gTLD) process was hopelessly corrupt, as it was more or less driven by those who sought to profit from the system -- folks who ran (or hoped to run) domain registration offerings. And, the entire thing seemed based around getting a ridiculous amount of money to launch these new TLDs and then run around convincing companies they need to pay up for new domains before someone else snaps them up.

However, now it's looking like it isn't just the idea that's a disaster, but the execution as well. Domain Incite's Kevin Murphy reports that ICANN's own CEO (who only joined recently), Fadi Chehade, has flat out admitted that they're nowhere close to ready, but things are going to launch anyway. David Mitnick has pulled out some of the key quotes that should be fairly scary, considering they're coming from ICANN's own CEO:

1. "Honestly, if it was up to me, I would delay the whole release of new gTLDs by at least a year."

2. "... a lot of the foundations that I would be comfortable with, as someone who has built businesses before, are just not yet there."

3. "We have people who took six years to write the [new gTLD Applicant] Guidebook and we're asking engineers and software people and third-party vendors and hundreds of people to get that whole program running in six months."

4. "When the number two at IBM called me, Erich Clementi, after we signed the deal with them to do the [Trademark Clearinghouse] he said 'Are you nuts?'. Literally, quote. He said: 'Fadi you've built these systems for us before. You know it takes three times the amount of time it takes to write the specs to build reliable systems.'"

5. "We're facing a difficult situation, we're working hard as we can, our people are at the edge."

6. "I don't mean to scare you, because I know many of your businesses rely on this, but the right people are now in place, we're building it as fast as we can but I want you to understand that this is tough, and I wish it were different. I wish you would all raise your hands and say: 'You know what? Let's take a break and meet in a year'."

7. "I don't want to delay this program, but under all circumstances my mind would tell me: stop."

from the ugh dept

Ever since ICANN announced plans to allow tons of new top level domains to enter the market, many have recognized that this was nothing more than a money grab -- as companies would feel compelled to buy up "their" names to keep them out of the hands of others. What's amazing is that TLD operators are barely even hiding this in their marketing material. Lauren Weinstein recently received
a "pitch" from the operators of the new .sx domain. .sx isn't one of the new "generic" TLDs from ICANN, but rather is a newish TLD from Sint Maarten (an "autonomous country" from within the Netherlands) similar to various other "new" TLDs built off of lucky country codes (such as .tv, .ly and .co). However, the marketing message for .sx is really quite incredible. Basically, they're saying .sx is quite similar to "sex" and, gee, you wouldn't want your brand associated with sex, would you?

Dear *******

We would like to inform you that the Landrush Phase of the new .SX
extension of Sint Maarten has now closed and will be available next
Thursday, on November 15th, 2012 in the final phase called

General Availability

> From that date, you will be able to register .SX domain names on a
first-come-first served basis.

We would like to emphasize the importance of the .SX extension that
can be confused with or misspelled from the word

sex

registering your trademark or company names as domain in the extension
may thus protect your image and prevent from confusion with the adult
industry.

If this feels mighty close to the traditional "nice business you've got there... wouldn't want anything to happen to it, now would you?" approach, that's because it's pretty clearly the idea behind this line of marketing. Pay up or something un-family-like might show up near your brand.

from the took-'em-long-enough dept

Looks like we've got something of a repeat of the Dajaz1 insanity, in which the US government seized and censored a website for over a year before giving up and handing the domain back -- though this time it's with Rojadirecta. You may recall the Rojadirecta case, where two domains have been held by the US government on a highly questionable legal theory for over a year and a half -- well, the government just dropped the case, and it appears that the domains will be returned.

The case began when ICE seized two Rojadirecta domains from the Spanish company Puerto 80. As we noted at the time, Puerto 80 had been found legal (twice) in Spain, so it was hard to fathom that there could be "willful" infringement here.

Of course, over time, the situation got even more ridiculous. As with Dajaz1 and other sites, the US Attorneys in charge of the case stalled when the site fought back. In the case of Rojadirecta, Puerto 80 decided to stop waiting and sued the government. From there, something of a comedy of errors by the government ensued, with bizarre and unsupportable claims, and (worst of all) repeated attempts to mix and match different pieces of the law to dance around the fact that there was no legal basis for the seizure and the whole thing was unconstitutional. Each time the feds would present an argument, as you picked it apart, you could see that even they didn't seem to understand the law.

It appears that someone over there finally figured it out. We'd been waiting a while to hear from the court, and the last thing we'd heard was Rojadirecta/Puerto 80 pointing to Judge Posner's recent ruling about how a site embedding clips from elsewhere isn't infringing. Some copyright maximalists insisted that this had nothing to do with Rojadirecta, and that Rojadirecta would still lose... but not everyone agreed.

Today the government filed a "voluntary dismissal" notice of the case against Rojadirecta.org and Rojadirecta.com. You can see the short dismissal notice below. What's unfortunate, of course, is that the government might now get away with this blatant censorship and disregard for basic due process, without a court ruling showing that it was an illegal move by the feds. In other words: without punishment, the feds may feel free to do this again. This is now the second (and third) example of the government seizing a domain and censoring it for over a year on a very questionable legal theory -- and when the pressure finally gets to be enough, the government turns tail and runs, giving back the domain with no explanation or apology for blatant censorship. That's unacceptable.

Mark Lemley, who was on the legal team defending Puerto 80, told me:

We're obviously thrilled that after 18 months it looks like we will get the domain names back. I think this is a sign that you can stand up for what's right in copyright law and win.

That's true... but just the fact that they had to fight this for 18 months while the government held their domains raises serious questions about the government's actions here. It's probably not worth it for Puerto 80 to pursue things any further, but it's unfortunate that in both cases where people have fought back against the government's over-aggressive seizures of domain names, the government has tried to wait them out... and then finally admitted by default that it was wrong, and handed back the domains.

I expect that we may see a few more such cases as well. Unfortunately, though, we may not get a clear legal ruling telling the government it can't do this -- meaning that they'll be free to continue to abuse their powers in such a manner going forward.

Update: Added the letter that the DOJ sent with the dismissal notice, suggesting that the MyVidster ruling impacted their thinking...

from the motherfucking-eagles dept

While we've written plenty about the US Justice Department and US Homeland Security (via ICE) seizing various websites on questionable legal authority by claiming they were tools used for criminal copyright infringement, a series of pretty massive screwups seemed to have them, at least temporarily, shying away from such seizures around copyright claims. Huge errors like seizing Dajaz1 for over a year and then having to admit they had no evidence and give it back seemed to at least make them a little less cowboyish about the websites they chose to shut down and censor.

But, of course, this is the federal government we're talking about, and they sure loved the ability to shut down speech without any sort of adversarial hearing or, you know, due process. So you just knew it wouldn't last. The latest is that the feds have seized three more domains (applanet.net, appbucket.net and snappzmarket.com), claiming that they were "engaged in the illegal distribution of copies of copyrighted Android cell phone apps." Indeed, a quick look at the internet archive certainly suggests that these sites advertised that you could get "paid" apps for free if you joined. But does that warrant a criminal investigation and seizure? Perhaps there are more details, but given the sketchy details of earlier seizures, I'd wonder.

But, more to the point, if these sites were really engaged in such things, why wouldn't a civil copyright infringement lawsuit suffice? Why should the government get involved, when it involves completely pulling down a website with no warning, no adversarial hearing and no due process for those accused?

The Justice Department seems to indicate that this sort of thing is now a "top priority," because (apparently) they have way too much free time on their hands:

“Cracking down on piracy of copyrighted works – including popular apps – is a top priority of the Criminal Division,” said Assistant Attorney General Breuer. “Software apps have become an increasingly essential part of our nation’s economy and creative culture, and the Criminal Division is committed to working with our law enforcement partners to protect the creators of these apps and other forms of intellectual property from those who seek to steal it.”

“Criminal copyright laws apply to apps for cell phones and tablets, just as they do to other software, music and writings. These laws protect and encourage the hard work and ingenuity of software developers entering this growing and important part of our economy. We will continue to seize and shut down websites that market pirated apps, and to pursue those responsible for criminal charges if appropriate,” said U.S. Attorney Yates.

“The theft of intellectual property, particularly within the cyber arena, is a growing problem and one that cannot be ignored by the U.S government’s law enforcement community. These thefts cost companies millions of dollars and can even inhibit the development and implementation of new ideas and applications. The FBI, in working with its various corporate and government partners, is not only committed to combating such thefts but is well poised to coordinate with the many jurisdictions that are impacted by such activities,” said FBI Special Agent in Charge Lamkin.

One other tidbit of interest. Unlike the previous seizure disasters, this one appears not to have been led by ICE, but directly by the Justice Department (via the FBI). The announcement doesn't name this as a part of "Operation in our Sites" which seems to be a term specific to ICE's controversial program. Either way, they're still certainly using the eagle-heavy "seized" graphic they love to throw around, so, of course, we'd be remiss if we did not remind folks that they can purchase their very own "seized tee," to show what you think of the government's efforts.

from the wrong-approach dept

"Cybercrime" investigator Rob Holmes has an interesting post arguing that seizing domains is a recipe for making the problems of illegal activity online even worse. He takes credit for being one of the first to suggest that domains could be viewed as "tools" of a criminal, thus making them ripe for seizure. However, he's not impressed by those in law enforcement who are eagerly seizing domains by the dozens -- in part because he thinks it helps actual criminals more than it hurts them:

The reason we are fighting the good fight is to stop people from doing bad things and hold them accountable for their actions. Whether you are enforcing trademark rights or car thefts, this has to be done one person at a time. In 2010 a client asked me what we could take away from the offenders to make them stop. My simple answer was “Their freedom.” Entrepreneurs will always find a way to do business. Bad guys need to be put away to reflect on their actions. Nothing else will stop them. When you take away only the tool, you are training the criminal to improve. I am not in the business of training crooks. Are you?

This, of course, is a different perspective. Most of us have been concerned about the free speech and collateral damage issues raised by domain seizures. But Holmes is making the argument that, even when we're talking about confirmed criminal activity, domain seizures are counterproductive because they're going after a tool rather than those actually responsible.

from the but...-money dept

New York City officials are apparently all excited about a guaranteed $3.6 million "risk free to taxpayers" after signing a deal with a Virginia company to offer .nyc domains. This is one of those things that sounds good until you think it through, and then you realize it's effectively a hidden business tax. NYC gets to promote it as a way for more companies in NYC to have domains, and to identify themselves as NYC-based companies. But for companies already based there, they now need to buy up these domains they don't want or need, just to keep others from buying them up.

To businesses, which only need one website address, new domain names are often a tax they must pay to protect their brand. It’s as if someone printed an alternate copy of the White Pages and asked companies to buy a listing before it was sold to someone else.

In this case, a New York City company like Bloomberg would have to buy Bloomberg.nyc or face having to buy it back at a higher price. Other iconic New York City brands will likely watch nervously to see what becomes names like of “gossipgirl.nyc” or “magnoliabakery.nyc”

The company behind this is asking people to pre-register "for free," but (tellingly) does not share how much the .nyc domains will actually cost once registration opens for real. So while NYC officials can pretend that they've "found" money here, the reality is that they're creating a totally wasteful business tax and a true nuisance for NYC businesses.

from the maximalist-land-grab dept

IP maximalists now seem to be targeting ICANN as yet another way to overclaim their rights and block legitimate domains from existing. As we've been discussing, there have been several fights concerning the new generic top level domains (gTLDs) where we've seen folks like the entertainment industry demand extra special measures to keep them from being used to infringe copyrights. But the trademark folks may be going even further. We already have the (somewhat flawed) UDRP (Uniformed Domain Dispute Resolution Process) system for trademark holders to try to claim rights over a domain. This process lets trademark holders go through an arbitration process if they feel someone is abusing a trademark in a domain. In the past, we've discussed how this process is pretty sloppy, but it still heavily favors trademark holders. As in many arbitration situations, the big companies who bring back business to the arbitrators (magically) seem to win quite frequently.

However, that's just not enough for these trademark holders. Last year, for these new gTLDs, they were also able to establish a separate process, the URS (Uniform Rapid Suspension System) which, everyone was told, would only be used for the most egregious cases of trademark infringement -- the cases where it's so totally obvious that the domain in question infringes that the whole process can be cheap and streamlined.

However, before this process has even really been tested, trademark holders are trying very, very hard to basically lower the standards on URS and broaden the reach of it, such that it more or less replaces the UDRP process -- and thus makes it a system that lets trademark holders seize the domains of those they accuse of infringement very cheaply, with minimal review, and to also block certain words from being registered in domains. Even more incredible? They're abusing an ICANN comment process to push this plan (which ICANN had earlier rejected).

All of this came out recently in a letter to ICANN's board raising concerns about this effort. ICANN had opened up a comment period for a specific issue having to do with gTLDs, and the trademark folks went hogwild, asking for all of these other things, including:

Lowering the standard for when the simplified URS process (seize domains quickly, ask questions later) process can be put in place. Originally, the bar had been set high so that this process could only be used in truly egregious cases where there was no question that the domain was infringing. But the proposal sought to lower the standard such that it's the same as the UDRP standard (effectively stepping in and replacing UDRP).

Changing the already agreed upon URS system, such that domains that go through the process aren't just suspended, but transferred to the trademark holder. In other words, rather than just shutting down the domain, this fastpass system would simply turn the domains over to the trademark bullies.

Saying that the URS process (which was developed just for these new TLDs) should also be expanded to cover the most important TLD of all: .com. Yes, that's right. That's the goal in all of this. To actually make it much, much easier for trademark bullies to completely shut down and gain control of domains that they don't like others to use, and to do it cheaply, with very little review.

And they did all this by abusing a comment process that has nothing to do with these issues, and despite the fact that earlier hard-fought battles over these issues came out with them on the losing side. But, this is how IP maximalists work. They just keep trying every way possible to get the same ridiculous rules made in their favor.

from the keystone-kops dept

The feds domain name seizure powers seem simple enough (if of extremely questionable legality, seeing as domains involve speech which requires a higher standard to seize), so it really amazes me how badly they seem to regularly screw up in using them. The latest is the seizure of Bodog.com as well as the indictment of Bodog boss Calvin Ayre. While there's been lots of attention paid to the seizures of sites having to do with copyright and trademark infringement, the same feds (ICE and the DOJ) have also been using the same powers gleefully to stop you from playing poker online. You may recall that they seized PokerStars, Full Tilt Poker and Absolute Poker last April, followed up by 10 more domain seizures in May (which was especially bizarre, since the key thing that's illegal is processing payments, but in that case, the federal government set up its own fake payment processor for those sites...).

Bodog, however, has been considered the "big dog" of online poker for quite some time, raising some questions as to why it wasn't included in last years' busts. Of course, in typical fashion, the feds seem to have targeted the wrong domain. Bodog gambling sites moved off of Bodog.com ages ago -- first due to a patent dispute, and later to avoid having the sites on US controlled domains. For quite some time the company has mainly relied on bodog.eu, and more recently has been offering a different domain called Bovada.lv for US-based players.

As for Bodog.com? It had become the face of the "Bodog Brand" and was used for licensing the Bodog name, but wasn't itself a gambling site in ages. The affidavit for seizure (pdf and embedded below) claims that federal agents set up accounts and gambled on Bodog.com, but I really wonder if they didn't miss the fact that they were redirected to another site. Checking the internet archive, it certainly looks like Bodog.com was pretty much out of commission long before the feds claimed to have set up and used accounts there. Either way, the seizure seems unlikely to do much to stop gambling on Bodog sites, considering that the actual gambling was happening on sites, other than Bodog.com, which likely are still perfectly operational.

As for the actual indictment (pdf and embedded below) against the individuals, it's more or less what you'd expect. They focus a lot how Bodog moved money around, but much of that was only necessary because of the (relatively recent) decision by some politicians in the US to sneak an anti-online gambling bill into a bill about protecting our ports and harbors. Ever since then there's been a growing effort in Congress to actually make online gambling legal again -- in part because the big casinos who mostly supported the original ban have now changed their minds and want in on the action. In other words, while it is likely that Ayers and his team did violate the law, there are a lot of questions about the law itself, and there's a half decent chance that what he was doing will be perfectly legal before too long.

Kinda makes you wonder why the feds are spending their time and taxpayer-funded resources on such a thing, doesn't it?

As for Ayers, he sounds pretty defiant, suggesting that this is really just the feds acting in the best interests of large casinos who don't like the competition:

I see this as abuse of the US criminal justice system for the commercial gain of large US corporations. It is clear that the online gaming industry is legal under international law and in the case of these documents is it also clear that the rule of law was not allowed to slow down a rush to try to win the war of public opinion.

These documents were filed with Forbes magazine before they were filed anywhere else and were drafted with the consumption of the media as a primary objective. We will all look at this and discuss the future with our advisors, but it will not stop my many business interests globally that are unrelated to anything in the US....

The whole thing seems like a big waste of time by some federal officials who like big headlines, but don't seem particularly focused on stopping crimes that actually cause real harm.